As there is a fair chance of the market witnessing solid correction based on several concerns, it’s important to pick a stock after analyzing its ability to survive a downturn based on its fundamental strength and ability to capitalize on the ongoing health crisis. Adding the popularity component to your stock selection method could further enhance your chance of gaining now…
After all, a stock’s price movement significantly depends on how popular it is among investors irrespective of fundamentals.
Alibaba Group Holding Ltd (BABA), Nike, Inc. (NKE), Sony Corporation (SNE), and Starbucks Corporation (SBUX) are currently part of the Robinhood 100 Most Popular list they are leaders in their respective industries with a proven short-term history of outperformance. Modified offerings, upcoming product launch, and fundamental strength should help these stocks easily survive if we witness another market turmoil this year.
Alibaba Group Holding Ltd (BABA)
BABA, the leading platform for global wholesale trade in China has been operating for over two decades. Its financial affiliate Ant Group Inc. is set to make the largest stock market debut on November 5th, raising at least $34.5 billion and holding dual listings in Shanghai and Hong Kong. The 11.11 Global Shopping Festival, or ‘Singles Day,’ is held on November 11th every year. But a new sales window has been added this year from November 1st and is life now. BABA is on the Robinhood 100 Most Popular list having 96% of the analyst ratings as ‘Buy.’
Note that BABA is one of 5 stocks in the Reitmeister Total Return portfolio. Learn more here.
BABA’s revenue increased 34% year-over-year to $21.7 billion for the fiscal first quarter ended June 2020. Alibaba cloud, BABA’s cloud-computing arm is expected to turn profitable by March 2021. The revenue from cloud computing increased 59% year-over-year to $1,747 million for the quarter. EPS increased by 18% year-over-year to $0.26. Digital Media and Entertainment revenue increased 9% year-over-year to $990 million primarily due to an increase in revenues from online games and membership subscriptions.
Analysts expect BABA’s revenue to increase by 54.6% for the second quarter ended in September 2020 and 38.3% in 2021. The company’s EPS is expected to increase by 14.1% for the about-to-be-reported quarter, 27.2% next year, and at a rate of 3.7% per annum over the next five years. Moreover, BABA has an impressive earnings surprise history with the company beating consensus EPS estimates in each of the trailing four quarters.
Cainiao, the logistics affiliate of BABA launched end-to-end logistics and supply-chain services for local businesses in South Korea last month. It is expected to reduce the shipping time in half. To monetize China’s growing interests and demand for global music and culture, Bravado extended its product offerings through Tmall Global which is one of the core businesses of BABA. Having expanded into various domains, BABA is well-positioned to gain. The stock gained 43.7% year-to-date and is currently trading 2% below its 52-week high.
How does BABA stack up for the POWR Ratings?
A for Trade Grade
A for Buy & Hold Grade
A for Peer Grade
A for Industry Rank
A for Overall POWR Rating
You can’t ask for better. The stock is also ranked #1 out of 115 stocks in the China industry.
Nike, Inc. (NKE)
One of the largest global suppliers of athletic apparel and footwear, NKE was founded in 1964. Associated with the iconic slogan “Just do it,” the company offers products in eight categories, including running, basketball, football, men’s training, women’s training, sportswear, action sports, and golf. NKE is on the Robinhood 100 Most Popular list having 87% of the analyst ratings as ‘Buy.’
NKE successfully made the digital transition and it is reflected in the first-quarter results (ended August 2020). The company’s digital sales increased 82% year-over-year. The company’s direct sales also increased by 12% year-over-year to $3.7 billion. EPS for the quarter increased 10% year-over-year to $0.95 and surpassed the consensus estimate by 102%.
Analysts expect NKE’s revenue to increase by…
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